Many experts projected five Base Rate cuts by the Bank of England in 2024. However, Knight Frank said financial markets had revised their forecast to three. The stronger-than-expected wage growth, reaching 6.2% in Q4 2023 in the private sector, has contributed to higher inflation and influenced this adjustment.
Knight Frank predicts that the current rate of 5.25% will likely remain the same in the next two Monetary Policy Committee meetings. The expectation is that when rates eventually decrease, lenders will follow suit, providing relief for borrowers nationwide. However, mortgage rates have still declined over the last six months as lenders become more confident in the UK economy.
Knight Frank also highlighted that the mortgage market offers no alarming signals presently, with HSBC declaring gross mortgage loans of £23bn in 2023.
For property investors, Moneyfactscompare’s latest data reveals that buy-to-let mortgage rates are at their lowest since mid-2022, offering a positive outlook for this segment of the UK real estate investment market.
Discover More: If you want more buy-to-let insights, check out our guide on Liverpool investment property.